Skip to main content Accessibility help
×
Hostname: page-component-cd9895bd7-lnqnp Total loading time: 0 Render date: 2024-12-22T18:36:32.588Z Has data issue: false hasContentIssue false

10 - Tinbergen’s Theory of Economic Policymaking

from Part II - The Years of High Expertise

Published online by Cambridge University Press:  11 June 2021

Erwin Dekker
Affiliation:
Erasmus Universiteit Rotterdam
Get access

Summary

Chapter 10 argues that the central contribution of Tinbergen is his decision models, which conceive of economic policy as the relation between instruments and goals. The chapter analyzes the way in which the original econometric models of the 1930s were transformed by Tinbergen (and Ragnar Frisch) into models for policymaking, in response to their new state positions. Tinbergen was director at the Central Planning Bureau in the Netherlands, which developed into the premier economic policy institute there. The transformation of econometric models into decision models no longer treated policy as a given, but instead treated behavioral economic relations as given, and the policy variables as decision variables, placing the economic expert inside the model. The chapter explores this fundamental transformation, and how it impacted Tinbergen’s own view of economics. He no longer believed that the primary goal was to describe the economic structure, but rather to design of (optimal) decision models to pursue targets. This was true at the firm and state levels. He sought to redefine crucial concepts such as unemployment and business cycles in policy terms. Finally, he used that transformation to analyze the optimal level of decision-making in the economy, a crucial insight for his later work.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×